China wants to strengthen its influence on the economy in the ASEAN countries through creation of a ASEAN (Development) Bank. It will be a commercial bank and at the same time a policy bank. It could became a mini Asian Development Bank (ADB).
According to an exclusive report from Reuters, China is considering a proposal to set up a regional bank to help its small and medium enterprises (SMEs) invest in Southeast Asian neighbours, fund infrastructure projects and promote development in southwestern China and Southeast Asia.
The bank will also settle China-ASEAN trade in yuan, a step in China’s long campaign to make the yuan, also known as Renminbi or people’s currency, a regional currency.
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China’s growing interest in the South-East Asian region is in fact quite rational from its standpoint. It is also an outcome of a combination of factors, such as protectionist measures in the US and the EU against Chinese exports; unabated price rise in China, including higher labour costs, energy prices and land rents; and the appreciation of the renminbi. In this scenario, the South-East Asian region promises access to a bigger market. China also stands to gain by tapping into captive resources of this region, especially, minerals and energy.
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